Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2016 Page 2
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32Certain-Medicaid-Waiver-Payments-May-Be-Excludable-
The sum of social security wages and social security
From-Income
for questions and answers on the notice.
tips is less than the minimum yearly earnings subject to
social security and Medicare tax withholding for a
Business Services Online (BSO). The SSA has
household employee, and
enhanced its secure BSO website to make it easier to
The Medicare wages and tips are less than the
register and navigate. Use BSO’s online fill-in forms to
minimum yearly earnings subject to social security and
create, save, and submit Forms W-2 and W-2c to the SSA
Medicare tax withholding for a household employee.
electronically. BSO lets you print copies of these forms to
If the above conditions occur in an electronic wage
file with state or local governments, distribute to your
report, the SSA will notify the submitter by email or postal
employees, and keep for your records. BSO generates
mail to correct the report and resubmit it to the SSA. If the
Form W-3 automatically based on your Forms W-2. You
above conditions occur in a paper wage report, the SSA
also can use BSO to upload wage files to the SSA, check
will notify the employer by email or postal mail to correct
on the status of previously submitted wage reports, and
the report and resubmit it to the SSA.
take advantage of other convenient services for
employers and businesses. Visit the SSA’s Employer W-2
Note: Do not write “corrected” or “amended” on any
resubmitted reports.
Filing Instructions & Information website at
for more information
Household employers, see Pub. 926, Household
about using BSO to save time for your organization. Here
Employer's Tax Guide.
you also will find forms and publications used for wage
Social security numbers. Do not truncate social
reporting, information about verifying employee social
security numbers shown on Forms W-2, W-2AS, W-2GU,
security numbers online, how to reach an SSA employer
and W-2VI. Social security numbers are required on
services representative for your region, and more.
Forms W-2. See Taxpayer identification numbers, later.
Preview BSO by viewing a brief online tutorial. Go
See also Regulations section 301.6109-(4)(b)(2).
to
and select
TIP
Filers of other forms, such as certain Forms 1099/1098,
“Business Services Online Tutorial” under
may truncate the social security number (XXX-XX-4567)
“Handbooks, Tutorials & Videos.”
to combat identity theft.
Correcting wage reports. You can use BSO to
Limit on health flexible spending arrangement (FSA).
create, save, print, and submit Forms W-2c, Corrected
For 2016, a cafeteria plan may not allow an employee to
Wage and Tax Statement, online for the current year as
request salary reduction contributions for a health FSA in
well as for prior years. After logging into BSO, navigate to
excess of $2,550. The salary reduction contribution
the Electronic Wage Reporting home page and click on
limitation of $2,550 does not include any amount (up to
the “Forms W-2c/W-3c Online” tab. Also, see E-filing and
$500) carried over from a previous year. For more
E-filing Forms W-2c and W-3c.
information, see Health flexible spending arrangement
(FSA).
Tax relief for victims of terrorist attacks. Disability
payments for injuries incurred as a direct result of a
Additional Medicare Tax. In addition to withholding
terrorist attack directed against the United States (or its
Medicare tax at 1.45%, an employer is required to
allies) are not included in income. Because federal
withhold a 0.9% Additional Medicare Tax on any Federal
income tax withholding is only required when a payment is
Insurance Contributions Act (FICA) wages or Railroad
includable in income, no federal income tax should be
Retirement Tax Act (RRTA) compensation it pays to an
withheld from these payments.
employee in excess of $200,000 in a calendar year. An
employer is required to begin withholding Additional
Distributions from governmental section 457(b)
Medicare Tax in the pay period in which it pays wages or
plans of state and local agencies. Generally, report
compensation in excess of $200,000 to an employee and
distributions from section 457(b) plans of state and local
continue to withhold it until the end of the calendar year.
agencies on Form 1099-R, Distributions From Pensions,
Additional Medicare Tax is only imposed on the
Annuities, Retirement or Profit-Sharing Plans, IRAs,
employee. There is no employer share of Additional
Insurance Contracts, etc. See Notice 2003-20 on
Medicare Tax. All wages and compensation that are
page 894 of Internal Revenue Bulletin 2003-19 at
subject to Medicare tax are subject to Additional Medicare
Tax withholding if paid in excess of the $200,000
Earned income credit (EIC) notice (not applicable to
withholding threshold.
Forms W-2AS, W-2CM, W-2GU, and W-2VI). You must
For more information on Additional Medicare Tax, go to
notify employees who have no income tax withheld that
IRS.gov and enter “Additional Medicare Tax” in the search
they may be able to claim an income tax refund because
box.
of the EIC. You can do this by using the official Internal
Unless otherwise noted, references to Medicare tax
Revenue Service (IRS) Form W-2 with the EIC notice on
include Additional Medicare Tax.
the back of Copy B or a substitute Form W-2 with the
same statement. You must give your employee Notice
Medicaid waiver payments. Notice 2014-7 provides
797, Possible Federal Tax Refund Due to the Earned
that certain Medicaid waiver payments are excludable
Income Credit (EIC), or your own statement that contains
from income for federal income tax purposes. See Notice
the same wording if (a) you use a substitute Form W-2
2014-7, 2014-4 I.R.B. 445 available at
that does not contain the EIC notice, (b) you are not
2014-4_IRB/ar06.html. Also, see
required to furnish Form W-2, or (c) you do not furnish a
-2-
General Instructions for Forms W-2 and W-3 (2016)
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